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CNN Newsnight Aaron Brown
Stand-Off at Church of Nativity Nears End; Friends of Luke Helder Surprised That He is Mailbox Bomber
Aired May 08, 2002 - 22:00 ET
THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.
THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.
AARON BROWN, CNN ANCHOR: Tonight, the program will be entirely -- well, almost entirely in English. Those of you with us last night will understand the significance of that. Those of you hoping you'd be able to use the program tonight to brush up on your Hebrew, our apologies.
On to the whip, we start again in Jerusalem. Wolf Blitzer is there. There is much literally going on as we speak, Wolf the headline.
WOLF BLITZER, CNN CORRESPONDENT: The headline right now is that within a few moments, we are anticipating the first of more than 100 individuals inside the Church of the Nativity in Bethlehem to walk out. The Israeli military has already brought a bus to the area. There are vans. They will be leaving.
The first individuals to leave will be 26 Palestinians, who will be going to Gaza, and then more than 80 civilians. Thirteen of Israel's most wanted for the time being, Aaron, will remain inside.
BROWN: OK, and you'll stand by there and we will get to you as soon as we see signs of movement there. We'll continue on for a change, because President Bush seemed to like what he heard from Yasser Arafat today. That is among the stories John King has been working at the White House, so John, give us a headline please.
JOHN KING, CNN SENIOR WHITE HOUSE CORRESPONDENT: That's right, Aaron, the President called it an incredibly positive sign that Yasser Arafat today, in Arabic, strongly condemned terrorism, but the President added a bit of a caveat to that. He said now he would like to see strong words - strong actions from Arafat, excuse me, to back up those strong words.
BROWN: John, thank you. The latest now on the pipe bomb suspect, Luke Helder, Jeanne Meserve is working that for us, so Jeanne a headline from you in Menomonie, Wisconsin.
JEANNE MESERVE, CNN CORRESPONDENT: Friends of Luke Helder say their jaws hit the floor when they heard he was a suspect. Nice, normal, even sweet are the words they use to describe the young man who prosecutors say has now admitted planting pipe bombs -- Aaron.
BROWN: Jeanne thank you, we'll get back to you and the rest of the group in a moment. Also coming up, depending on how this thing plays out, to be perfectly honest, in Bethlehem, we hope to their news. We'll do Israeli TV and Al-Jazeera, the Arab TV Network in the program. In fact, everything we're about to tell you is now dependent on what happens in Bethlehem.
Huge gains on Wall Street today. That's a good news story, but we have a bad news story off the street that should make investors pretty angry, Wall Street analysts dolling out bad advice on stocks in a scheme to enrich their firms and themselves. We'll hear, we hope, from New York's Attorney General.
Ann Nissen tonight on spider-man" -- no, this isn't Toby McGuire, no one wearing red spandex on this program. This is a real Spider-Man, one with 50,000 eight-legged friends in his office alone.
That's the way we planned it. We'll see how it plays out. We begin as we often find ourselves in the Middle East, somewhere between words and deeds. On Palestinian television today, in Arabic, Yasser Arafat said he will take measures to confront and prevent all terror attacks from all parties against Israeli civilians. These are important words, long awaited words, words that Israel and the Bush Administration had been demanding Arafat say, but so far they are just words.
In the deeds department, we see reports tonight that Israeli troops are massing near Gaza, just hours after the Israeli cabinet gave the prime minister the go ahead to retaliate for yesterday's suicide bombing.
And then there is a very fluid situation tonight, as we speak, in Bethlehem. There is lots on Wolf Blitzer's plate.
(BEGIN VIDEOTAPE)
BLITZER (voice over): In accordance with Jewish custom, they starting burying the dead right away, and as the funerals began, Israelis and Palestinians alike were bracing for the next shoe to drop in the aftermath of the pool hall bombing near Tel Aviv.
Prime Minister Ariel Sharon, immediately after returning to Israel from his abbreviated U.S. visit, met with his cabinet to plot Israel's next move. After more than four hours of discussion, the cabinet issued a vague statement authorizing the prime minister and the defense minister to take military steps soon to fight terror.
Earlier in the day, Palestinian Authority President Yasser Arafat went on Palestinian television to condemn the Rishon Letzion bombing and to warn against further terrorist strikes against Israelis.
YASSER ARAFAT, PRESIDENT, PALESTINIAN AUTHORITY (through translator): And I have issued my orders to the Palestinian National Security Forces to confront, and to prevent any terror attacks on Israeli civilians no matter which Palestinian factions stand behind them.
BLITZER: But Israel officials say words won't be enough. They're demanding strong action from Arafat. Some within Sharon's cabinet are already calling for the exile of the Palestinian Leader and his top lieutenants from the West Bank and Gaza.
Other options, officials say, include a resumed military strike against targets in the West Bank, but expanding that operations this time to include Gaza as well.
Israeli police say they did manage to thwart a second suicide attack, when this Palestinian man's explosives went off prematurely. He survived the explosion, was removed by a robotic arm, and is in serious condition. Two Israelis passersby were slightly injured. Israeli police believe his target was a crowded bus station in Afula, just southeast of Haifa.
(END VIDEOTAPE)
BLITZER (on camera): But for now, all eyes on the Church of the Nativity in Manger Square in Bethlehem. Momentarily, we're told, the first of those inside, Palestinians, some 26, will be leaving, getting on a bus. They will be transferred to Gaza, then 84 civilians inside, monks, priests, nuns. Other so-called peace activists, they'll be brought out as well. Finally, 13 of Israel's most wanted so-called senior Palestinian terrorists, they will remain inside the Church of the Nativity for the time being, until diplomats from around the world, Aaron, can find a place where they could be exiled -- Aaron.
BROWN: Wolf, I'm just looking at the shot out of Bethlehem. There's something oddly incongruent about it. In this ancient place, you see a metal detector set up where the negotiators have been walking through it. I mean it's just one more sign. Quickly, a question on Gaza, are you hearing much about what sort of military build-up is going on there on the Israeli side?
BLITZER: We're not hearing a whole lot, other than a lot of expectation, a lot of anticipation. The cabinet did meet for some four hours. They met at an air base, at a military base just outside Ben Gurion Airport.
The prime minister upon landing at Ben Gurion, went right to this emergency session with his cabinet and they voted unanimously to give the prime minister and the defense minister full authority to take retaliatory measures against terrorists, and everyone's waiting to see what they decide to do. But we don't anticipate it will be a very long wait.
BROWN: Now, it seems like we're doing a lot of waiting. Let me allow you to go back and do some reporting. We'll wait and see what happens in Bethlehem and we'll move on until it does, if it does.
Now, to the White House and the President's meeting with Jordan's King Abdullah. Monday night on this program, the king said the closer we get to peace, the more likely it is extremists will try and mess it up.
Well in truth, they will mess it up even if peace is not very close. Yesterday's bombing came just as tensions of the last months eased ever so slightly, and there are those in the region for whom even the slightest easing of tension is unacceptable.
They can mess it up, as the king said, and perhaps they have again and that's the problem for both the President of the United States and the King of Jordan. We go back to John King at the White House.
(BEGIN VIDEOTAPE)
KING (voice over): The President had rare words and praise for Palestinian Leader Yasser Arafat.
GEORGE W. BUSH, PRESIDENT OF THE UNITED STATES: I was pleased to read he transcripts of his call against terror in Arabic. I was most pleased that he did that. I thought that was an incredibly positive sign. As you know, I've been one who is disappointed in the past, and therefore, I hope that his actions now match his words.
KING: Both Mr. Bush and Jordan's King Abdullah say the latest suicide bombing can not be allowed to derail diplomacy, and both know Israel's response is the next big question.
BUSH: Whatever response Israel decides to take, my hope of course is that the prime minister keeps his vision of peace in mind.
KING: King Abdullah says the suicide bombers win if diplomatic efforts collapse.
KING ABDULLAH II, JORDAN: We'll discuss the views this evening and maybe see if we can find a road map to have America's support to the Israelis and Palestinians the peace that they deserve.
KING: But the Bush team is skeptical it can find consensus on such a road map. Prime Minister Sharon returned home angry and says any talk of negotiating a Palestinian state is premature, any talk of direct Israeli negotiations with Mr. Arafat, out of the question.
Yet Arab leaders, like King Abdullah, say Mr. Arafat must be involved and that there is no reason for talks unless the top priority is an independent Palestinian state.
(END VIDEOTAPE)
KING (on camera): And because of that impasse over just how to proceed, senior Bush Administration officials telling us tonight, plans for that early summer conference on the Middle East now in doubt, hinging perhaps on what Prime Minister Sharon and Chairman Arafat say and do in the next few days. Aaron.
BROWN: Well, that lasted all of a week, John, that idea. It shows something you and I have talked about on the program before, that parties, Jordan, the Saudis, the United States, whoever, can plan and talk and think about this, but there is always someone out there who can in a heartbeat throw a wrench into it all.
KING: Exactly right. Now they still want the conference to go forward, I should make that clear, but they wanted to have it say three or four weeks from now. They think that now is significantly in doubt and they are waiting for what you were just talking about with Wolf Blitzer, to see just how forceful the Israeli response is.
But they can not agree who should go. They can not agree what the agenda should be. Under those circumstances, most in this White House believe it would be counterproductive to have a meeting if you came out of it with nothing at all, because then already delicate diplomacy, difficult diplomacy would collapse.
BROWN: When you talk about they can't agree on who would go, this is at what level of government official goes?
KING: Well, Prime Minister Sharon wants to go himself. He has made that clear, but he doesn't want Mr. Arafat there. So the U.S. compromises, have the foreign ministers come. So Foreign Minister Peres would come from Israel, somebody from the Palestinian negotiating team, try to make some steps forward, try to build some confidence, some progress before you get to the difficult question of well, Arafat and Sharon are going to have to decide whether we can go forward from here.
The United States wants to go slow and incrementally build up some momentum. The Israeli leader wants to be there from Day One, doesn't want Arafat there. They're still fighting over that, and then they're fighting over what should be on the agenda, what should they actually talk about once they decide who gets to go? So, still a lot of work to be done, and because of the bombing, because of the prime minister's very strong words, U.S. officials think they may have to hit the pause button.
BROWN: John, thank you, Senior White House Correspondent John King from the White House lawn tonight. We're joined in Washington by Diana Butto, who is a legal adviser to the PLO. It's nice to see you again.
DIANE BUTTO, LEGAL ADVISOR TO PLO: Thank you.
BROWN: Troops massing at Gaza is what we hear, what's your reaction?
BUTTO: Well, this is something that's not new. Sharon has continued to follow a policy of terrorizing a civilian population in the hope that terrorizing a civilian population will put an end to suicide bombings, and we all know very well that that's not going to put an end to it.
What will put an end to it is if we have a final peace agreement, if we understand that there's a direct link between Israel's lack of security and the Palestinians' lack of freedom, and if we begin to actually address Palestinians' lack of freedom, and not only Israel's security.
BROWN: I wonder if you would agree, I don't know, that Mr. Arafat who complained today that he did not have the resources to do the work necessary. When he had the resources available to him, he didn't do a whole lot to stop the terrorist attacks them. BUTTO: Well, we have to understand that the Palestinian Authority is only in control of 18 percent of the West Bank, which is divided into 13 separate non-contiguous cantons, the areas outside of that 18 percent rest with Israel. It's in Israel's security control.
The only way that you can actually prevent suicide bombings from occurring is if you have security cooperation, if the Palestinian security forces cooperate with the Israeli security forces.
Israel unilaterally cut off security cooperation in October 2000, despite the fact that we were repeatedly calling for it. So when suicide bombings were taking place, we were continually saying to Israel, if you want security, you're going to have to cooperate with us.
It's become very clear that Israel, with the world's largest - I'm sorry with the Middle East's largest military, can not stop suicide bombings and neither can the Palestinian Authority with absolutely no military. The only way that it can be done is if it's done together.
BROWN: Well, you know, actually there's one more way to look at it, which is that it can't be done, that there are always going to be, as King Abdullah of Jordan said the other day, that there is always going to be those people in the region who in fact do want to see the destruction of Israel, and that no matter what, how moderate, if that's the right word, the Palestinian Authority begins to behave, no matter how the Israeli government begins to behave, those people still are going to do everything they can to eliminate the prospect of peace.
BUTTO: Well, in fact, it exists on both sides. In fact, there are a number of Israelis who never want to see a two state solution, and unfortunately those Israelis are in the government. We've seen over the past 35 years colonization of the West Bank.
We've seen - in fact, just during this past year that Sharon has been in power, even though the Mitchell report, even though Senator Mitchell has called for a freeze on all settlement activity, even though the entire international community has called for it, instead what we've seen is the continuation of Israel's colonization policy; in other words, destroying any confidence that there will ever be a Palestinian state.
It's as though the two parties are negotiating over a piece of pizza, and while the parties are negotiating, Israel is continually eating that piece of pizza.
BROWN: Well, but again I know how frustrating it is to continually come back to this question of terrorism and security as if it were the only issue, but I think it's fair to say that until there is some handle on that, the Israelis aren't really much in the mood to deal.
BUTTO: Well, it's actually the opposite. I think we have to recognize that the equation is one of land for peace that if Israel simply withdraws to the borders, withdraws from the land it occupied in 1967, it will get peace. This is something that President Carter put forth, something that every successive U.S. administration has put forth.
Israel's simply not willing to recognize that. Instead, what they're saying is that they have to have peace first and then we'll think about talking about land and that's simply --
BROWN: Well, that's exactly right. They're saying peace for land.
BUTTO: Well no, we're saying land for peace and that's the problem.
BROWN: You're saying land for peace. They're saying peace for land.
BUTTO: And the entire international community has said that it's one of land for peace. Let me just put it simply. Why is it that it's only - that Israel is entitled to freedom, peace and security and that the Palestinians are not? We're both inextricably linked and we have to begin to recognize that the Palestinians are entitled to freedom and that the only way that we will actually get that freedom is if we start going on a path whereby Israel completely withdraws from the West Bank, gives us our freedom, and then Israel will have peace. This has been something that 22 nations have also said to Israel.
BROWN: Diana Butto, thank you for joining us. We appreciate your time very much.
BUTTO: Thank you. Thank you.
BROWN: An important day. We continue to watch events in Bethlehem, a possibility of that long and difficult stand-off is about to come to an end, so one eye is on that.
When we come back, we'll also take a look at what happened in Boston, Cardinal Law on the stand, and more. This is NEWSNIGHT from New York on CNN.
(END VIDEOTAPE)
BROWN: It feels a bit like we're sitting here waiting for a shoe to drop in Bethlehem. We're just going to keep forging on until it actually unfolds there.
So up next, their news, the developments in the Middle East today, a scene on Israeli and Arab television and a good day for that. In the way editorial choices are made, tonight echo the theme of the day from us, words and deeds.
Al-Jazeera, the Arab network, led with Yasser Arafat's words. Israel's news focused on the human cost of yesterday's bombing. We begin their news tonight with Israeli TV. UNIDENTIFIED ISRAELI CORRESPONDENT (through translator): It appears who entered the gaming hall where the explosion took place came with both and explosive belt and a suitcase full of explosives. The police believe that he received prior information.
UNIDENTIFIED CORRESPONDENT: Prime Minister Sharon is coming back to Israel tonight and is meeting with his cabinet. He will ask again to neutralize or to send away Arafat.
ARIEL SHARON, ISRAELI PRIME MINISTER (through translator): Sharon says, guilty, guilty.
UNIDENTIFIED CORRESPONDENT (though translator): The spiritual leader of Hamas says terrorism will continue.
UNIDENTIFIED CORRESPONDENT (through translator): Another homicide bomber tried to detonate explosives but just wounded himself critically at (inaudible) as a result of defective explosives. There were no other casualties.
UNIDENTIFIED CORRESPONDENT (through translator): Today will be the funeral of seven of the 15 casualties in the explosion. Up to now, 11 names were made public. Nina Hickry (ph), 60 years old from Tel Aviv, she will be buried in Yarcon Cemetery (ph). Basa Trah (ph), 60 years old from Poland, he will be buried in Yarcon Cemetery. His wife is hospitalized in Behrens (ph) Hospital with wounds, in stable condition. Shusada Magray (ph) 51 years old from Tel Aviv, he will be buried in Yarcon Cemetery. She left behind a husband, three children and five grandchildren. Galya Mossa (ph) 56 years old from Mashalisa (ph), she will be buried in the cemetery in the city. Dire Lubetin (ph) 31 years old from Perzulia (ph), he was buried in a cemetery in the city. He left behind a wife five months pregnant with twins. Hayam Rafael (ph) 64 years old from Tel Aviv, he was buried in Holan (ph) Cemetery. Avi Bayas (ph) 26 years old from Meziona (ph), he was buried at the cemetery in the city.
(END VIDEOTAPE)
BROWN: Israel's Channel 2 News clearly the focus at the top of their broadcast on those who died in the suicide attack outside Tel Aviv. That is understandable, as it is Al-Jazeera's focus.
The Al-Jazeera program "Daily Harvest" led with Yasser Arafat's message, and of course the possibility of what the Israeli government will decide to do and where it will decide to do it. Here is their news.
(BEGIN VIDEOTAPE)
UNIDENTIFIED CORRESPONDENT (through translator): Welcome to our news show. President Yasser Arafat gave his orders to the Palestinian Security Forces to confront and stop any operations that he describes as terrorist against the Israeli civilians. Yasser Arafat also renewed his commitment and his participation, along with the U.S. and the international community, in their war against terrorism. YASSER ARAFAT (through translator): As the President of the Palestinian Liberation Organization and the National Palestinian Authority, I repeat my commitment and my participation, along with the USA and the international community in their war against terrorism.
I have given my orders to the Palestinian Security Forces to confront and stop any terrorist operations to attack Israeli civilians from any Palestinian side. At the same time, and in parallel, they'll also confront any attacks against the Palestinian civilians from the Israeli army and the settlers. We all condemn these attacks completely.
UNIDENTIFIED CORRESPONDENT (through translator): With me from Washington, previous U.S. Consul (inaudible). Mr. Arafat ordered his security forces to stop all attacks against the Israeli civilians. Did he do what he was asked to do and will the USA be happy with this order?
UNIDENTIFIED MALE (through translator): Well, I think that Yasser Arafat's statement is very important because he gave orders to stop all these attacks because it has bad consequences, and he also said that the Palestinian Authority will do all that they can to stop these attacks from happening, and I think that this is the response that the U.S. administration wanted to hear from Arafat.
(END VIDEOTAPE)
BROWN: Just a couple of quick samples of Al-Jazeera, Israel's Channel 2 as well, and a different editorial focus, choices they made and for understandable reasons. As we continue from New York, the latest on the Boston priest scandal. Up next, we'll find out more about the young college student though accused of being the pipe bomber. Lots to do, we'll be right back.
(COMMERCIAL BREAK)
BROWN: In court today, the FBI said that Luke Helder has admitted to being the person who placed pipe bombs in at least 18 mailboxes in the Midwest, in Colorado, and in Texas.
Less clear tonight why this 21-year-old, a child of small town Minnesota would do such a thing. Helder's father helped police in the case. He called police after he received a letter that led him to believe his son was involved in the bombings. Police then used Helder's cell phone to track him down. In court today, Helder heard the charges read and perhaps contemplated the prospect of a life in prison.
So who is he? What do we know about the boy next door who it appears became the domestic terrorist? Here's CNN's Jeanne Meserve.
(BEGIN VIDEOTAPE)
MESERVE (voice over): They say the face reflects the character. This face gave no clues that Luke Helder might have a dark side and neither did his behavior, says a former roommate. MATT DECORSEY, HELDER'S FRESHMAN ROOMMATE: I don't think I've ever seen him mad or yell or just get upset about anything the whole year that I lived with him. It was just -- he was just an easy-going guy.
MESERVE: Other acquaintances from freshman year concur, describing Helder, a junior and an art major, as normal, mild mannered, and apolitical. They say Helder had friends, was not a loner, but did seem solitary in his pursuits.
ANDY DOMOROVSKY, UNIVERSITY OF WISCONSIN STUDENT: He didn't go out of the room that often. He played his guitar, hung out, watched TV, spent time on the Internet.
MESERVE: This past September, Helder was issued a citation for possessing a marijuana pipe, but those who knew him freshman year say they never saw him use drugs. Helder did form a grunge band, Apathy. Mike Stanton was the drummer.
MIKE STANTON, DRUMMER: I always thought Luke was a really nice guy. I never thought anything like this.
MESERVE: Acquaintances say music was Helder's obsession, particularly the band Nirvana and its lead singer.
ANDY ARMSTRONG, UNIVERSITY OF WISCONSIN STUDENT: He seemed to have a fascination with Kurt Cobain. He dressed like him. He was a lot like him.
MESERVE: He was even wearing a Cobain tee shirt when he was arrested. Cobain committed suicide and recent communications attributed to Helder were peppered with references to death, including his own. Fascinations with death and even anti-government viewpoints are not unusual in teenagers, according to former FBI profiler Clint Van Zandt.
CLINT VAN ZANDT, FORMER FBI PROFILER: He still was experiencing basically what you and I and everybody else experience and all of our kids experience in college. What makes this guy built bombs and go across America? What changed that?
MESERVE: A university classmate says he did see changes in Helder in recent weeks.
UNIDENTIFIED MALE: He sort of had a real direct approach, talked all over the professor, get into arguments, disrupt class.
MESERVE: But at the Servicemaster franchise, where Helder had a part-time job, coworkers say they had seen no change in the young man they describe as nice, cheerful, even sweet. If they are struggling to understand his apparent transformation, imagine the difficulty his parents are having back in Pine Island, Minnesota.
(END VIDEOTAPE)
The family is planning to leave pine island tomorrow. They are not disclosing their destination. Obvious possibilities include Reno, where Luke is being held. Also Cedar Rapids, Iowa, where he's expected to transferred soon to face the first of the charges against him -- Aaron.
BROWN: You know, it's remarkable. We have been -- our crews been in Menomonie, reporting on this for more than 24 hours now. And it is hard in all of those interviews to find any real clue as to what drove this kid.
MESERVE: You're absolutely right. Most people just describe him as nice, normal, everyday kid, totally unremarkable in every way, except for the fact that he was cheerful, more cheerful than most. We spoke to some people who worked with him. They said he had a very sunny disposition. No one here is able to make any sense of anything what happened -- Aaron.
BROWN: Jeanne, thank you. Jeanne Meserve in Menomonie, Wisconsin.
Later on NEWSNIGHT, are brokers playing both sides of the street? We'll talk with New York Attorney General Elliott Spitzer about a scandal on Wall Street.
Up next, another scandal. Boston's cardinal has to answer questions about what he knew and what he did to prevent abuse by priests. This is NEWSNIGHT on CNN.
(COMMERCIAL BREAK)
BROWN: A lot ahead on NEWSNIGHT. In the second half hour, we'll meet a guy who deserves the title Spider-man. We'll also find out why shivers are running down the spines of some stockbrokers, and their bosses. It has nothing to do with how the market finished today. And up next, Boston's cardinal deposed about what he knew and what he did in the sex abuse scandal. This is NEWSNIGHT.
(COMMERCIAL BREAK)
BROWN: Tomorrow is Ascension Thursday, one of six holy days of obligation for Catholics. The obligation came early for Cardinal Bernard Law, but it was a very different one, nothing to do with the holy or the spiritual. He was deposed today in a courtroom with all of its manmade laws. Questioned for hours on his role in sheltering Father John Geoghan, accused of abusing 86 kids.
It is thought to be the first time a cardinal has ever taken an oath, anyone other to the pope, that is. And, while it is surely the most we have heard from Cardinal Law, that doesn't mean he actually revealed very much.
From Boston tonight, CNN's Jason Carroll.
(BEGIN VIDEOTAPE)
JASON CARROLL, CNN CORRESPONDENT (voice-over): Boston's embattled Cardinal Bernard Law left Suffolk Superior Court after being questioned for the first time under oath about what he knew about defrocked priest John Geoghan, and when he knew it. Mitchell Garabedian, the attorney representing 86 plaintiffs in a civil suit filed against the archdiocese, said Law suffered from a case of selective amnesia during his deposition.
MITCHELL GARABEDIAN, ATTORNEY: He's not going to admit anything that's going to hurt him, even if it's the truth.
CARROLL: Garabedian showed Law a copy of a letter sent to him in 1984 by a woman who claimed her nephews were molested by Geoghan. Law had initialed the letter and wrote a note to his bishop saying "urgent, please follow through." Law could not recall receiving the letter, but he later admitted when he knew about Geoghan's troubled past.
Question, as of September of 1984, were you aware that Father Geoghan had a history of homosexual involvement with young boys? Answer, "I was aware that there was involvement because of the, of having removed him out of one parish and putting him between assignments before sending him back to another."
Geoghan was moved to several parishes over the years, even though there were allegations he was sexually abusing children. Law defended his actions, saying Geoghan received psychological treatment.
Answer, "I was relying upon those assisting me to handle this adequately. And I was relying on their discretion in terms of the medical expertise. Question, "Did you have any system in place to make sure that the right medical experts were involved?" Answer, "No."
Geoghan was convicted earlier this year of molesting a young boy, but he's accused of abusing scores of children. One of his alleged victims was allowed to attend the deposition. Mark Keane said he felt Law was dishonest under questioning.
MARK KEANE: I was a little intimidated at first. He came off very soft-spoken. He is a very good talker. Not to compare him with Father Geoghan, but I experienced soft-spoken, good talkers before. And look where it got me.
CARROLL: Why was Law giving such a deposition? A judge ordered it, after the archdiocese backed out of a multimillion dollar settlement with the same 86 plaintiffs.
(END VIDEOTAPE)
And the archdiocese of Boston released a statement after the deposition, saying that Cardinal Law fully cooperated and answered all the questions and that he is looking to resolve this matter in an equitable manner. He's scheduled to be deposed again on Friday -- Aaron.
BROWN: Jason, thank you, Jason Carroll in Boston tonight. Up next on NEWSNIGHT, Wall Street's dirty little secrets. We're right back. (COMMERCIAL BREAK)
BROWN: A money story tonight. We don't do them too often. The stock market, as Lou reported a few moments ago, had its best day of the year. The Dow up more than 300. All this fueled by a report that cisco was doing a little better than expected. Cisco, by the way, trades at less than $20 a share. Your broker may have recommended it to you at, oh, let's say $80 a share. And you know, your broker feels really bad that you've lost all that money. He or she relied on the research. His employer provided it.
Now we come to find out, and we're pretty shocked, that at least in the case of Merrill Lynch, that research may have been misleading, a little scheme to boost the companies profits at your expense. Imagine that. And while we hate to sound any more cynical than we already do, the market watch dog, the Securities and Exchange Commission didn't seem to do much watching. It took New York state's Attorney General to find the proof. And he did. And we'll talk to him in a moment.
But first, the background from Alan Chernoff.
(BEGIN VIDEOTAPE)
ALLAN CHERNOFF, CNN CORRESPONDENT (voice-over): In the rough seas of the stock market, millions of Americans rely on brokerage firms as their guiding light. But the reliability of that guidance is in question as never before. Rather than offering clients objective opinions, it appears in many cases, Wall Street may have been selling a bill of goods.
New York Attorney General Elliot Spitzer uncovered internal communications at Merrill Lynch, the nation's biggest broker, showing researchers trashing stocks that they were telling the public to buy. Henry Blodgett, a former production assistant with CNNfn, went on to become a star Internet analyst for Merrill Lynch. On October 20, 2000, Blodget referred to Infospace in this internal memo as "a piece of junk." At the time, Blodgett had his top rating on the stock: buy.
On the day Blodgett began coverage of goto.com with a long-term buy, he wrote in an e-mail, "What's so interesting about Goto except banking fees?" Merrill Lynch apologized for the e-mails, but the chief executive made no apology for analysts helping investment bankers.
DAVID KOMARISKY, CEO, MERRILL LYNCH: Well, I think it's important for people to understand the role of research. Issuing buy and sell recommendations is only part of the role. Research has a critical role in the capital-raising process.
CHERNOFF: Spitzer is now investigating research at other brokers as well. Wall Street firms are supposed to maintain a "Chinese wall" between research and investment banking, so one doesn't influence the other. Truth is, brokerage veterans admit, the Chinese wall looks more like swiss cheese. Sean Ryan, a former banking analyst for Bear Stearns.
SEAN RYAN: You don't get paid to offer honest opinions solely for the benefit of investors. You get paid to sell stocks.
CHERNOFF: And it is well known on the street, that research analysts get paid much more to bring investment banking business to their firms.
RYAN: You have an analysts that make seven figures. Millions of dollars, in some extreme cases, tens and millions of dollars. Over 90 percent of that is coming from investment banking related business.
CHERNOFF: The Securities and Exchange Commission only began investigating Wall Street analysts two weeks ago. Chairman Harvey Pitt, a veteran lawyer who had represented numerous Wall Street clients, including inside trader Ivan Boesky, prefers the industry fix its own problems.
HARVEY PITT, SEC CHAIRMAN: I see a partnership between the government and the private sector. The government can define what is illegal, what is fraudulent, what is corrupt, but the private sector can take us beyond that, and define what's incompetent, what's unethical, what's improper.
CHERNOFF: In that spirit, the SEC today approved new rules governing analysts developed by members of the New York Stock Exchange, and the National Association of Securities Dealers. They include no promises of favorable research, no supervision by investment bankers, and no compensation tied to specific banking deals, though bonuses from general investment banking business would still be permitted.
(END VIDEOTAPE)
New York's Attorney General believes those rules are not tough enough. So he's pushing Merrill Lynch to do more, as part of settlement talks with the firm -- Aaron.
BROWN: Allan, thank you.
Now that settlement, when it comes, is not likely to make you whole. Your lost money is gone, and no is likely to go to jail either. So if you're waiting for that little piece of satisfaction, wait on. But uncovering Wall Street's dirty little secret was a remarkable victory nevertheless. And we talked with the man who did it, New York's attorney general Eliot Spitzer the other day.
(BEGIN VIDEOTAPE)
BROWN: In brief, tell me what it is that you have, first with Merrill Lynch and now with others, discovered?
ELIOT SPITZER, NEW YORK ATTORNEY GENERAL: What we discovered was the evidence that proves what many people have suspected for a long time, which is when Merrill Lynch said buy a stock, they may not have believed it. They may have been telling you to buy the stock, because they were getting investment banking fees from the company. And they had said to the company, we'll tell the public to buy the stock, even if it isn't a good investment. So they were fundamentally deceiving the public about the value about this investment.
BROWN: Why is that not a crime? Is it a...
SPITZER: It might be. In fact, I would say it is a crime. And I think, and I have said, that we could charge criminal conduct based upon what we have established. The issue is how do we solve the problem, the problem being, giving the public straightforward, honest analysis?
BROWN: Well, someone in your position once said, one good way to solve the problem is to throw the CEO in jail. Everyone else gets the message real quickly.
SPITZER: Right.
BROWN: I mean, I'm not being cute here, but if this is not a crime, it ought be, shouldn't it? I mean, that's fraud.
SPITZER: Well, it is a crime. It is fraud. We could charge it as such. I've said that very clearly to the folks at Merrill, to the public, to the SEC, Harvey Pitt with whom we are now partnering and trying to figure out how to solve this problem. The issue is who individually is culpable. How do you establish corporate culpability? And what do you do once you've establish it?
I think we have established corporate culpability and the public accepts that. Merrill Lynch properly apologized few days ago.
BROWN: Right.
SPITZER: Which it was an important step forward. The question is what remedies do you want to put in place, to both ensure investment confidence, to punish those who have committed wrongs, and solve the problems. So that prospectively, the conflicts of interest that existed, that led to this problem, won't reoccur.
BROWN: This is a lot like, I think, one of the things that have gotten auditors in trouble, which is on the one hand, they're auditing the books. On the other hand, they're getting paid tens of millions of dollars.
SPITZER: Absolutely.
BROWN: ...in consulting fees by the same company.
SPITZER: Right.
BROWN: So do you propose here to break off the two arms of Merrill, if you will, the retail, research versus the investment banking?
SPITZER: You know, that was one of the proposals that I floated. I haven't necessarily endorsed it because it was one of the more dramatic proposals. You separate the investment banking in the research sides of the business. The industry and the SEC are not for that. They think that there are more subtle ways to accomplish the same objective. And we're working to figure that out. This is not I -- do not pretend to have all the answers at this point in time about how to solve it.
We're working with the SEC. We're working with the industry leaders, who are thoughtful about this. We have to come up with something. You're right. The analogy is there. And Arthur Levitt proposed a long time ago, separating the auditing and the consulting pieces in the accounting world. That is the direction we're moving in that sector.
BROWN: I was wondering, why would subtlety matter here? I mean, it seems to me that...
SPITZER: Well, subtlety doesn't matter. Correctness does.
BROWN: OK. Because what ultimately, at the end of the day, I mean this is necessary for Merrill to do business and whoever else. It's not just Merrill. You're looking at others, correct?
SPITZER: Absolutely. We're looking at many of the major investment houses on the Street, trying not to destroy investor confidence beyond the caution that should be there, given what we've unearthed.
BROWN: Is there any reason to believe that what Merrill did, and the way Merrill did business, is significantly different from the way any of the other major players in the Street do business?
SPITZER: There is no reason to believe that it is necessarily different, but I have to be careful as a prosecutor.
BROWN: I understand.
SPITZER: I don't want to suggest that with respect to others, there is the same of evidence. The evidence we got with respect to Merrill I thought it was overwhelming. And that's why...
BROWN: Because the Merrill case, there were memos or e-mails, where the analysts said this stock's a turkey, while at the same time...
SPITZER: You're being polite. The e-mails were explosive. The e-mails when we got them, and unearthed them, were devastating in terms what they said about the way Merrill was evaluating the stocks, compared to what they actually told the public.
BROWN: You know, this is not a legal question, I guess. But I mean, when I first read about this, the first thing that hit me is, come on, you guys have no conscience.
SPITZER: Right.
BROWN: I mean, these are people who are paying a lot of bills. Retail people for Merrill Lunch paying a lot of bills. And you're -- I'll use the word non legally, this is fraud?
SPITZER: Yes. Oh, you're absolutely right. And you could see that angst in some of e-mails. One of the analysts wrote in an e- mail, we are losing money from Mr. and Mrs. Smith, sort of mythical Main Street investors, who were customers at the retail branch, because we're afraid to piss off the CEO of a company. That was it. She said we're losing their money, their pension, the money they send their kids to college with, because we're afraid to alienate an important client.
BROWN: It's nice to meet you.
SPITZER: Pleasure.
BROWN: Appreciate you coming in tonight. Thank you.
SPITZER: Thank you.
(END VIDEOTAPE)
BROWN: Eliot Spitzer the other day. Watch your portfolio. Stay with us, a real Spiderman when we return.
(COMMERCIAL BREAK)
BROWN: If "Segment Seven" has a theme tonight, it is this. Less marketing, more spiders. So no talk tonight of "Spider-man," the movie, or Spider-man, the lunchbox, or Spider-man, the underwear, or even "Spider-man the sequel," which by the way, will be coming to a theater near you May the 7, 2004.
Instead, we end the program with another Spider-man and a lot more spiders, itsy-bitsy and otherwise.
Here's Beth Nissen's report, as shot by the third camera crew she requested.
(BEGIN VIDEOTAPE)
BETH NISSEN, CNN CORRESPONDENT (voice-over): Norm Platnick is spider man.
NORM PLATNICK: Now this is a nice spider.
NISSEN: He's the spider curator at the American Museum of Natural History in New York.
PLATNICK: We have the largest collection of spiders, well over a million specimens here.
NISSEN: 50,000 of them are in his office, preserved in little vials and mason jars. Most of these spiders are tiny. He has some bigger ones in the hall.
PLATNICK: Spiders can be as small as the period at the end of a sentence or as large as a dinner plate, like span. NISSEN: He likes spiders.
PLATNICK: They're nice animals.
NISSEN: Animals? Most people think animals are insects.
PLATNICK: Not at all. These -- insects have six legs. Totally group of arthropods.
NISSEN: All spiders have eight legs. And all spiders spin silk, wonderous stuff.
PLATNICK: A strand of spider silk has a tinsel strength that's greater than steel of the same diameter.
NISSEN: Yet highly elastic.
PLATNICK: Spider silk is -- can easily stretch to three or four times its original dimensions and then snap back.
NISSEN: Only about half of all spiders weave webs. And those aren't always the Halloween style orb webs. There are also sheet webs and funnel webs. Spiders use webs to catch food. They set up sticky mid air traps, drop webs like a net, lasso and tie up prey like a cowboy with a rodeo calf. Spiders that don't weave webs, hunt.
PLATNICK: Some are sit and wait hunters. They wait for the prey to come to them. Some are more active, go and chase it.
NISSEN: And then start digesting.
PLATNICK: It's rather gory, actually. They'll first inject venum to paralyze it. And then they will secrete digestive enzymes, which liquify the prey. And then they suck up the liquid.
NISSEN: Ew.
PLATNICK: Well, you have to make a living somehow.
NISSEN: They'll eat almost anything they can catch. Butterflies, other spiders, even small snakes and fish, but not humans. Although if threatened, spiders such as this tarantula will bite.
PLATNICK: Watch out. You're getting too close to the jaws.
NISSEN: There are only two poisonous spiders in North America, the black widow and the brown recluse. Still, many people react to spiders the way a CNN sound man did, when this Brazilian tarantula momentarily got away from its handler. Those with arachnophobia, fear of spider, can't avoid them. They're almost everywhere.
PLATNICK: You're probably seven or eight feet of a spider, no matter where you are. The only place on earth that has no spider at all, as far as we know, is Antarctica. NISSEN: He says as far as we know, because so little is known about spiders. Scientists have identified 36,000 species of spider, but they estimate that's only half the actual number.
PLATNICK: And we're destroying their habitat, so that we're losing them before we even know what we're losing.
NISSEN: While many people might say good riddance to spiders, Platnick says humans should say thank you.
PLATNIC: The fact is if there were no spiders, we probably won't be here. Spiders eat an enormous number of insects. And without that, the insects would have devoured all our crops long ago. We would have no food.
NISSEN: Something to keep in mind the next time you see a daddy long legs on the sidewalk or a spider in the bathtub, or cobweb in the corner.
Beth Nissen, CNN, New York.
(END VIDEOTAPE)
BROWN: Sweet dreams. That's our report for tonight. Sign up for our daily e-mail, why don't you? Go to cnn.com and go to the NEWSNIGHT page. It is one of the best kept secrets in all of journalism. Very informative and fun. Do that. We'll see you tomorrow at 10:00. Good night for all of us at NEWSNIGHT.
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